The effective closure of the Strait of Hormuz has removed a significant share of global energy supply, transforming what was expected to be a year of surplus into one defined by scarcity and heightened volatility.
While longer term forecasts had pointed to easing conditions across oil and gas markets, escalating conflict in the Middle East is driving a shift from financial tightness to physical shortage. Low global inventories, strained logistics and limited spare capacity have left markets with few tools to absorb shocks of this scale, resulting in sharp moves across crude, refined products and LNG. Demand remains more resilient than expected, with industrial activity, power generation and petrochemical requirements continuing to hold firm despite early signs of pressure in more price sensitive regions.
This latest disruption highlights deeper structural challenges following a prolonged period of underinvestment, declining reserve replacement and constrained supply responsiveness outside key producing regions. With energy security still largely addressed reactively rather than strategically, we expect volatility to remain elevated and supply risks to persist, reinforcing the importance of molecules in the global energy system throughout 2026 and beyond.
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Important note: This report may contain general financial product advice, and you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.
